THE PR.COMMISSIONER OF INCOME TAX -1 (INTERNATIONAL TAXATION) vs. GE AVIATION MATERIALS LP

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ITA/1354/2018HC DelhiDLHC01071280201830 November 2018Bench: HON'BLE MR. JUSTICE SANJIV KHANNA,HON'BLE MR. JUSTICE ANUP JAIRAM BHAMBHANI2 pages
AI SummaryRemanded

What did the High Court hold?

The Delhi High Court disposed of the appeal in terms of its order dated 01.06.2018 in ITA No. 661/2018, Pr. Commissioner of Income Tax-1 (International Taxation) vs. General Electric Power Systems INC. The Court noted that the question raised by the Revenue regarding the levy of interest under Section 234B of the Income Tax Act, 1961, was covered against them by the High Court's judgment in Director of Income Tax (International Taxation) vs. GE Packaged Power Inc. (2015) 373 ITR 65 (Delhi). As an appeal against this judgment was pending before the Supreme Court, and the parties agreed that the Supreme Court's ruling would apply to the present appeal, the High Court disposed of the appeal accordingly. The operative direction was to dispose of the appeal, with liberty to the parties to file an application after the Supreme Court's decision if any difficulty arose. The finding on the issue of Section 234B interest is implicitly that it is covered against the Revenue by the cited precedent, pending the Supreme Court's decision.

What were the facts?

The appellant, the Principal Commissioner of Income Tax-1 (International Taxation), filed an appeal against the respondent, GE Aviation Materials LP, concerning assessment year(s) not specified. The appeal challenges an order or action related to the levy of interest under Section 234B of the Income Tax Act, 1961. The procedural history indicates that the parties agreed to dispose of the present appeal in terms of a previous order in ITA No. 661/2018, citing Sections 158A and 158AA of the Act, though acknowledging their non-strict applicability. The core issue revolves around the levy of interest under Section 234B, which the Revenue acknowledges is covered against them by a Delhi High Court judgment in Director of Income Tax (International Taxation) vs. GE Packaged Power Inc. (2015). A Special Leave Petition against this judgment is pending before the Supreme Court.

What were the issues?

1. Whether the levy of interest under Section 234B of the Income Tax Act, 1961, is sustainable in the facts and circumstances of the case, as argued by the Revenue. The Revenue contended that the issue of levy of interest under Section 234B is covered against them by the Delhi High Court's judgment in Director of Income Tax (International Taxation) vs. GE Packaged Power Inc. (2015) 373 ITR 65 (Delhi). They further stated that an appeal against this judgment is pending before the Supreme Court. The Revenue agreed that the ruling by the Supreme Court would equally apply to the present appeal. The assessee's specific arguments are not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 234B,Section 158A,Section 158AA

AI-generated summary — verify with the full judgment below

$~30 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 1354/2018 THE PR.COMMISSIONER OF INCOME TAX -1 (INTERNATIONAL TAXATION) ..... Appellant Through: Mr. Ruchir Bhatia, Adv. versus GE AVIATION MATERIALS LP ..... Respondent Through: Mr. Sachin Jolly, Adv. CORAM: HON'BLE MR. JUSTICE SANJIV KHANNA HON'BLE MR. JUSTICE ANUP JAIRAM BHAMBHANI O R D E R % 30.11.2018 CM APPL.50069/2018 (exemption) Allowed subject to all just exceptions. CM APPL. 50070/2018 (delay in re-filing) Delay in re-filing is not opposed by the respondent-assessee. Accordingly, the application for condonation of delay is allowed. ITA 1354/2018 Counsel for the parties state that the present appeal may be disposed of in terms of the order dated 01.06.2018 passed in ITA No. 661/2018, the Pr. Commissioner of Income Tax-1 (International Taxation) vs. General Electric Power Systems INC. It is stated that this would be in consonance with Sections 158A and 158AA of the Income Tax Act, 1961, though these provisions are not strictly applicable.

2.

The question raised by the Revenue in these appeals relates to levy of interest under Section 234B of the Income Tax Act, 1961 which issue is covered against them vide the judgment of this Court in Director of Income Tax (International Taxation) vs. GE Packaged Power Inc., (2015) 373 ITR 65 (Delhi). 3. Appeal against the said decision is pending before the Supreme Court as special leave to appeal has been granted. 4. Counsel for the parties state that the ruling by the Supreme Court would equally apply to the present appeal. Recording the above, the appeal is disposed of. 5. In case of any difficulty, it will be open to the parties to file an application in this appeal after the decision of the Supreme Court. SANJIV KHANNA, J. ANUP JAIRAM BHAMBHANI, J. NOVEMBER 30, 2018/uj

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